"Regional Property Insights"
Queenstown Lakes - Limited Correction Coming
There has been a lot of land development in the Queenstown and Wanaka areas over the past few years and section sales in Queenstown have been trending up since the post-GFC lows. A flattening in activity from 2017 - 2020 came to an end with a pandemic-related surge as people shifted to the region.
This shift to the regions is highly likely to ease off elsewhere in the country, but in Queenstown the return of international visitors is likely to inject some additional support across all our measures of housing activity.
For the past year section sales have fallen just 13% compared with a nationwide decline of 32%.
With regard to property sales there has been a decline of only 2% this past year versus an 18% fall across all the country. The extent to which sales ease from current levels is likely to be amongst the smallest for all the regions we track.
When we look at the following graph showing annual numbers of consents being issued for the construction of new dwellings, one thing stands out. There is an upward trend which has been in place since 2013 and the sharp decline over 2020 associated with closure of the borders has been reversed. Consent numbers have risen by 45% over the past year whereas the nationwide rise has been 24%.
The extent to which consents fall away in the coming two years is likely to be limited.
Tony Alexander, June 2022